Not doing backups is crazy and scary given that your data is business/mission critical and not your movie collection. So whatever you do, backup your data. Consider the following scenario: you're performing the encryption and during the encryption process you have a power failure on the power grid. In that case you would will lose a lot, if not all your data.

So invest the time to backup - even if you have to backup over a 56k line, it's worth the time.

Depends a lot on which OS you're using, for example Windows supports EFS (Encrypted File System), which is considered quite secure and relatively reliable.
Very simple to perform - simply mark a checkbox on the folder...

There are also full disk encryption options, such as Windows7 BitLocker.